On the Meaning Of Facebook
by Bob DeSena, Tuesday, July 5, 2011Before we all get cranky at the end of this piece, let’s understand that I’m asking the question, not providing the answer. Or at least the definitive answer. In fact, I’m guessing that the answer to “What’s the meaning of Facebook?” hasn’t been made clear yet to any of us, because even Facebook doesn’t know.I asked a few people for their thoughts — and they ranged from the original, “It’s (still) a place to check out chicks,” to the more ethereal, “Facebook is a marketing accelerator.” Donald Rumsfeld might say, at the present time it is simply unknowable.

But I do know it is one of the most important questions for all of us today, because Facebook has gone from being merely a phenomenon to being a force of nature. And the impact of that force will extend well beyond its online roots.

Two weeks ago it was reported that Facebook will

Image via Wikipedia

take over the #1 spot in display advertising this year with approximately $2.2 billion in sales. It has 500 million active users who spend over 700 billion minutes per month with Facebook. It is poised to generate $100 billion in its presumed initial public offering, probably next year. There are many more statistics that are equally mind-boggling in terms of (literally) unprecedented scale. And it has made the once mighty MySpace a memory. But when you think of a theme song for just where Facebook is today in its evolution, the most appropriate title is still “We’ve Only Just Begun,” performed by the Carpenters in 1970. (Although it’s an oldie, don’t worry, you can find Karen Carpenter singing it on YouTube.)

Start referencing any of the statistics in fact, and consider that $2.2 billion is paltry, almost trivial in marketing dollars invested in Facebook today, and that’s the issue. Yes, it is only seven years old, and yes its essence is social, not commercial. But one of these days soon, we’ll talk of the 1 billion registered users and the 750 million active users of this platform. And 2 or 5 or 10 billion will still not be the right amount of marketing dollars invested.

The problem, I suggest, is that we continue to think about the last ad platform when dealing with the next one. Our frame of reference changes slowly, which is why the original online advertising efforts were referred to as brochureware, and why mobile media, with more devices distributed than television, is fighting its way to 3 and 4 billion marketing dollars invested and not five times that figure as it should be. We realize only later that the new platforms are new in many more ways than technologically.

I’ve been privileged to work this year with several market-leading companies on an advanced advertising initiative. Its initial focus is on ad-supported VOD but it has implications beyond any single platform. In the just-completed first phase (the free report can be downloaded at http://aamp.blackarrow.tv/), one of the key findings was that brand marketers today are looking to eliminate any intermediary between themselves and their consumer. We have all only just begun, it seems, to internalize and to act on the meaning of the phrase we have repeated for years: “The consumer is in control.” And Facebook represents the perfect vehicle to learn how to do that. Is it advertising, or a new form of commercial conversation? It actually doesn’t matter what we call it, just that we understand the difference.

Lester Wunderman taught the industry the true, broad definition of direct marketing years ago. It is a process, not a technique, he said. It involves precise understanding of your target audience by listening to them, then engaging in a personal conversation and building an ongoing relationship. An elegant model, not easy to execute. But it sounds like Facebook to me.

Maybe Facebook is telling us that we’re all direct marketers today.

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Facebook is an American Treasure one which could save the economy of the United States but not if control is lost to China. Business is Business and there is no doubt that Facebook’s growth globally must include a strategy to serve China. WCN Transmedia Group has some ideas we would love to share to both monetize streaming video and create a win win for both the USA and China.

China Wants to Buy Facebook Article from Forbes Online

According to the business news website, Beijing approached a fund that buys stock from former Facebook employees to see if it could assemble a stake large enough “to matter.” Moreover, Citibank is rumored to be trying to acquire as much as $1.2 billion of stock for two sovereign wealth funds, one from the Middle East and the other Chinese. Business Insider reports a third source, from a “very influential” Silicon Valley investment bank, confirms that Citi is representing China.

Should Beijing be allowed to buy a part of Mark Zuckerberg’s site? Business Insider tells us there is “little need” for concern about Chinese censors looking at the photos and postings of the 700 million people who trust Facebook with their personal online activity.

First, China’s position won’t be large. A billion-dollar investment does not buy much influence in a site expected to be worth a hundred times that when it goes public. Second, Beijing will be acquiring nonvoting stock. Third, shareholders don’t get the right to look at what’s on the site. All of these arguments from Business Insider ring true.

Yet they are all beside the point—and there are other reasons to be concerned. The business site says that “sovereign wealth funds are pretty distinct from their governments.”

Perhaps Norway’s fund is, but not China’s. The Communist Party, despite three decades of economic reform, insists on its monopoly of political power. And to maintain that monopoly, it tightly controls its own instrumentalities. That’s especially true at this moment because the Party is in the midst of the most comprehensive crackdown on society since the 1989 Beijing Spring. Chinese leaders clearly view social media as a threat to their rule, especially after seeing its force-multiplying effect in the ongoing Arab Spring protests that have toppled governments.

In short, China’s sovereign wealth fund, which is no more independent of the Communist Party than the Beijing municipal government, wants to buy a stake in the world’s most prominent social networking site because Chinese leaders want to control social media. And they hope to do that as part of their comprehensive campaign to dominate the conversation about China—not just inside the country but around the world as well.

Beijing, during the last decade, announced initiatives to change discourse on foreign university campuses with its Confucius Institutes—now 322 of them—and Confucius Classrooms in elementary and high schools—369 of those. Moreover, its “go global” initiative is trying to affect news coverage of China by opening bureaus outside the country to internationalize state media, especially Xinhua News Agency, China Central Television, and People’s Daily.

And this is where the Facebook founder is giving Beijing an opening. Zuckerberg visited China in December and is scheduled to return, perhaps in September, in his bid to access the world’s largest online community, 457 million at last count.

“One big reason American firms stumble in China is that the government tends to favor locals when it comes to regulation,” Business Insider points out. “One way to make sure that doesn’t happen is to allow the government to own a stake.”

Beijing wants to own stakes in foreign firms because it is trying to control them. Its ambitions may at the moment look unrealistic to us, but that does not mean swaggering—and strategic-thinking—Communist Party officials do not hold them.

The cocky Chinese are not the only parties deluding themselves. Zuckerberg, in the words of one reporter, “believes that Facebook can be an agent of change in China, as it has been in countries such as Egypt and Tunisia.” After the disastrous China experiences of Yahoo and Google and the troubled history of Microsoft there—not to mention Beijing’s recent tirade against foreign social media—the Facebook founder appears both arrogant and naïve.

Chief Operating Officer Sheryl Sandberg is reportedly “wary about the compromises Facebook would have to make to do business there.” If she loses her argument with Zuckerberg and Facebook enters China, the company will eventually be subject to demands to censor its sites, those both inside and outside China. That’s apparently why the Chinese want to own a big stake in Facebook. They are, in short, looking for control in the long run. No other explanation is consistent with the Party’s other media and “educational” initiatives.

Of course, a Beijing-influenced Facebook will be hit by even more bad publicity—and inevitably defections. Other social networking sites will spring up to capture fleeing users. The genius of America is that its open and broad market eventually punishes the arrogant and the naïve by allowing choice.

According to the business news website, Beijing approached a fund that buys stock from former Facebook employees to see if it could assemble a stake large enough “to matter.” Moreover, Citibank is rumored to be trying to acquire as much as $1.2 billion of stock for two sovereign wealth funds, one from the Middle East and the other Chinese. Business Insider reports a third source, from a “very influential” Silicon Valley investment bank, confirms that Citi is representing China.

Should Beijing be allowed to buy a part of Mark Zuckerberg’s site? Business Insider tells us there is “little need” for concern about Chinese censors looking at the photos and postings of the 700 million people who trust Facebook with their personal online activity.

First, China’s position won’t be large. A billion-dollar investment does not buy much influence in a site expected to be worth a hundred times that when it goes public. Second, Beijing will be acquiring nonvoting stock. Third, shareholders don’t get the right to look at what’s on the site. All of these arguments from Business Insider ring true.

Yet they are all beside the point—and there are other reasons to be concerned. The business site says that “sovereign wealth funds are pretty distinct from their governments.”

Perhaps Norway’s fund is, but not China’s. The Communist Party, despite three decades of economic reform, insists on its monopoly of political power. And to maintain that monopoly, it tightly controls its own instrumentalities. That’s especially true at this moment because the Party is in the midst of the most comprehensive crackdown on society since the 1989 Beijing Spring. Chinese leaders clearly view social media as a threat to their rule, especially after seeing its force-multiplying effect in the ongoing Arab Spring protests that have toppled governments.

In short, China’s sovereign wealth fund, which is no more independent of the Communist Party than the Beijing municipal government, wants to buy a stake in the world’s most prominent social networking site because Chinese leaders want to control social media. And they hope to do that as part of their comprehensive campaign to dominate the conversation about China—not just inside the country but around the world as well.

Beijing, during the last decade, announced initiatives to change discourse on foreign university campuses with its Confucius Institutes—now 322 of them—and Confucius Classrooms in elementary and high schools—369 of those. Moreover, its “go global” initiative is trying to affect news coverage of China by opening bureaus outside the country to internationalize state media, especially Xinhua News Agency, China Central Television, and People’s Daily.

And this is where the Facebook founder is giving Beijing an opening. Zuckerberg visited China in December and is scheduled to return, perhaps in September, in his bid to access the world’s largest online community, 457 million at last count.

“One big reason American firms stumble in China is that the government tends to favor locals when it comes to regulation,” Business Insider points out. “One way to make sure that doesn’t happen is to allow the government to own a stake.”

Beijing wants to own stakes in foreign firms because it is trying to control them. Its ambitions may at the moment look unrealistic to us, but that does not mean swaggering—and strategic-thinking—Communist Party officials do not hold them.

The cocky Chinese are not the only parties deluding themselves. Zuckerberg, in the words of one reporter, “believes that Facebook can be an agent of change in China, as it has been in countries such as Egypt and Tunisia.” After the disastrous China experiences of Yahoo and Google and the troubled history of Microsoft there—not to mention Beijing’s recent tirade against foreign social media—the Facebook founder appears both arrogant and naïve.

Chief Operating Officer Sheryl Sandberg is reportedly “wary about the compromises Facebook would have to make to do business there.” If she loses her argument with Zuckerberg and Facebook enters China, the company will eventually be subject to demands to censor its sites, those both inside and outside China. That’s apparently why the Chinese want to own a big stake in Facebook. They are, in short, looking for control in the long run. No other explanation is consistent with the Party’s other media and “educational” initiatives.

Of course, a Beijing-influenced Facebook will be hit by even more bad publicity—and inevitably defections. Other social networking sites will spring up to capture fleeing users. The genius of America is that its open and broad market eventually punishes the arrogant and the naïve by allowing choice.